As the year 2022 dawned ,Torbit Consulting, the most credible real estate platform, in its blogpost laid down a clear roadmap for real estate with specific projections for 2022.[Text Wrapping Break]
While summing up 2021, Sanjeev Kathuria, Founder & CEO, Torbit Consulting in a special blog – ‘Real Estate Foreseen 2022’ projected what path the real estate sector would chart , with key trends. Drawing upon his vast and rich experience in real estate, he had observed that 2022 would be a promising year for the sector. While the residential segment, according to him, was geared to emerge as a clear winner, luxury housing, second home market along with manufacturing , logistics , warehousing and industrial parks had immense opportunities.
Today as we look back at the first half of the year gone by, all the prophetic predictions made by us about real estate have come true.In an elaborate forecast, the blog post had mentioned that residential absorption would continue at the ongoing pace with luxury housing, second homes and 3BHK units turning out to be major growth drivers. The PropTiger report fully endorses this by mentioning that there was 49% YoY housing absorption between July-September 2022 with high demand setting the ball rolling for the December quarter.
Our blog also highlighted that luxury housing with resort/hotel like facilities will be the star performer and units with 2 plus bedrooms and 3-4 bedrooms will be most favoured and do well. Industry reports are a testimony to it. According to Anarock ,in H1 2022, the share of apartments priced over 1.5 crore has doubled and 14% of overall housing units sold were luxury homes. Developers are now coming up with new launches which are resort-like luxury homes. About 67% HNIs are looking at making investments in luxury housing this year. And according to the CII-CBRE survey report for H1 2022, 2&3 BHK units together constitute 82% of overall housing demand.
In the backdrop of our observation that Tier 2 cities will be best suited for choice of living and investments, Anarock survey shows that 61% end-users and 39% investors are keen to buy property in Tier 2 cities. According to a SBI report, many Tier 2 towns have witnessed over 15% YoY change in home prices till March 2022. Regarding the second home market, we had predicted that it was bound to do well for the next many years. A 360 Realtors report endorses this, saying that the second home market along with retirement homes is set to grow at a CAGR of 24% in next 5 years.
On the commercial office front, our blog had mentioned that Grade A office space will see high absorption with current leasing rates and vacancies attracting big corporates. Market reports point to 35% increase in investments in commercial office space with strong occupier demand for Grade A office space. A C&W report projects 85-90 msf of cumulative net absorption over next 3 years with prospects of good capital appreciation and rental yield.
In the context of Alternative Asset Classes, We had forecasted that 2022 will be the year of development and leasing of warehouses . Large industrial hubs with modern and planned infra will be a new paradigm in real estate and developers could go for joint ventures. This has come true as gross leasing of warehousing space in Q1 22 is up 17% to 6.2 msf and according to JLL, there will be record net absorption of 42.5 msf in 2022 as against 39 msf in 2021. In order to tap the growing demand for logistics and warehousing, large institutional and logistics developers are forming JVs with Indian and global partners. This year Inter Globe has formed a JV with US based logistics giant United Parcels Service (UPS) . Indospace has inked Rs 1000 crore JV with KSH Infra to develop logistics parks across India. GMR Infra is eyeing a JV with Warburg Pincus-backed logistics developer ESR in Hyderabad.
With all these prophetic predictions truly, we have lived up to Torbit’s tagline,- Think Real Estate, Trust Torbit’ !